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Hello, Mobile Operators? This is Your Age of Disruption Calling (mckinsey.com)
Analysts at McKinsey & Company write: For the better part of a decade, telecom companies have suffered through declining revenues, cash flow, and return on investment just as tech companies like Google, Facebook, Amazon, and others have mushroomed by building their businesses on the operators' own infrastructure. While these tech visionaries have enjoyed well over $1 trillion in combined market-cap growth by innovating and thinking differently and adeptly, telecom companies have tried to compete by implementing the same old survival tactics: cutting costs, reducing the workforce, and timidly entering into new business adjacencies. The trouble is that playbook no longer applies. [...] We've seen this before in other capital-intensive industries. The airline industry, for example, despite incredible growth in travel during the early part of this century, destroyed economic value until 2015 when, for the first time, the industry-level average return on invested capital (ROIC) was just in excess of its cost of capital. This return to economic profitability was achieved through a combination of falling fuel prices; significant industry consolidation, especially in the United States; and the growth of ancillary revenues, such as checked-baggage fees. If global operators were to follow the airline industry's prior trajectory, the implications could be dramatic. That's not just for the operators that would see declining investment as capital and talent move into sectors with superior returns but also for current and future over-the-top (OTT) players, such as Amazon, Apple, Facebook, Google, and Netflix, who rely so heavily on the operators' networks and investments.
Well, I've certainly had my unfair share of calls disrupted, so turnabout is fair play.
They're common carriers. We just want their transport and can do without all the expensive add-ons that they want to cram on our bills. But that's not a sexy business model.
slashdot: A failed experiment.
And these jokers collectively almost destroyed capitalism as we knew it. "I can take bad debts and consolidate enough of them and they will be good debts. Then I will slice off the good debt and magically we have transformed 10 million dollars worth of junk loans into 10 million dollars worth of gilt edged widows-and-orphans securities! Aren't we amazing!"
The sad thing is we solve partial differential equations or manage warehouses or trudge through snow and ice to keep a power plant operating. And hand over all our investments and retirements funds over to these idiots to manage.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Electricity isn't "sexy". Neither is city water or trash disposal services.
Common carriers are a necessary component driving many other services, and given the demand I'm failing to understand how or why any of them are struggling.
It's possibly because they're universal dicks.
They made answering machines obsolete by providing the service for free, and the service is now too awkward and unwieldy to use. Whereas before, you could say "this is Jeff, leave a message", it's now "the number you have dialed, digit... digit... ... is not available. At the tone, please leave a message. To leave a callback number..."
It was a grab for billing, because if they could keep the caller beyond 1 minute, then they could charge for another full minute.
The result? Almost no one uses voicemail any more.
They let affiliates engage in "cramming" (putting unwanted charges on your phone bill), then argue with customers who want to take the charges off. They implemented "caller ID" and then made it trivial to spoof, they don't do a thing about spam calls, telemarketer calls, or fraud calls such as "This is Barbara from cardholder services...".
[Earlier in this century] They freely give out customer information and "who we called, and when" to the government without a warrant, then said "It's not a constitutional violation because we're not the government". They let the US government copy all call information and send it to the government, they give out location information without a warrant ("cell tower information is not on paper, so 4th amendment doesn't apply").
Their customer service has a reputation for being one of the worst, they took $200B to wire up "the rest of the country" for broadband, then sat on the money and did nothing, they don't bother to upgrade their equipment in areas with spotty coverage...
The list goes on, this is only off the top of my head.
The telcos have never considered the phone users to be their actual customers, so they never bothered to make their customers happy. This was the "you are not the customer, you're the product" modern business model.
By ignoring their customer base and not changing with the times, they're getting their lunch eaten by other companies.
...monopoly pays. Every one of those tech giants has - or is verging on - a virtual monopoly on their corner of the tech universe. I'm not saying those positions haven't been earned, but of course, they've remained resistant to competition in no small part due to acquisitions - which allowed them to fend of new technologies around the edges that might have grown into serious competition. And those acquisitions might not have been allowed in a regime that understood the problems of monopolization.
Where there's competition for essentially identical service, there is minimal profit. That's good for the public, and not so good for the corporations. Not so bad for them either. They're still making money and providing millions of jobs. It's just that Wall Street doesn't see enough potential for explosive growth to care. And that, of course, is because they're all busy chasing the new monopolies - and looking for the next one. And that's driven by a tax system that encourages businesses to focus on low-taxed capital gains instead of higher-taxed wage income. Seems there's a way to fix some of this by rewriting the tax code - wanna bet on that happening... ;-)
In any case, judging from the diminishing returns in the Airline and Telecom industries - where consolidation has been brutal, it doesn't even take so much competition for it to work its magic. So what we're left with is competition + low prices + shitty service - versus new tech industries with monopoly profits, pretty good service (as long as a machine can provide it) and phantom low prices at the cost of all privacy, and pervasive advertising. Hmmm.
Posted from my Android phone. Oh, I can change this? There, that's better...